Was Canonical’s $32 Million Ubuntu Edge Crowdfunding Campaign Just An Expensive Publicity Stunt?

First, let’s get this out of the way: Canonical’s tantalizing Ubuntu Edge superphone is not going to happen. The company’s Indiegogo campaign to raise $32 million, which we’ve written about a timeortwo, didn’t hit its intended goal. In fact, despite smashing a crowdfunding record with $12,812,776, Canonical was still roughly $20 million shy of raising enough cash to fund the ambitious project. The company said from the get-go that if it didn’t secure all $32 million in funding, it wouldn’t attempt the project at all.

That’s fair enough--if you’re going to do something, you should really do it right, especially using millions in other people’s money--and perhaps Canonical should get some credit for a hearty moonshot, because if they had somehow raised all that money, today would be a very interesting one for the mobile industry.

Instead, poof--the whole thing is over. And there’s something in the tone of Canonical head honcho Mark Shuttleworth’s parting campaign update that sounds a little off.

He thanks all of the project’s supporters for their generous donations, including Bloomberg LP’s $80,000 Enterprise Bundle pledge, as well as the Ubuntu community for spreading the word, getting excited about the project, and even taking out online ads. But then he said, “Most importantly, the big winner from this campaign is Ubuntu.” He added, “While we passionately wanted to build the Edge to showcase Ubuntu on phones, the support and attention it received will still be a huge boost as other Ubuntu phones start to arrive in 2014.”

He went on to say that because of all the support and publicity, Canonical has had productive conversations with major manufacturers, and now it also has many of the biggest mobile networks signed up to its Ubuntu Carrier Advisory Group. “They’ll have been watching this global discussion of Ubuntu and the need for innovation very closely indeed,” he said.

In sum, Shuttleworth doesn’t seem bummed at all about not getting the Ubuntu Edge funded. Instead, he’s nearly crowing about all the great things that are happening now for Ubuntu as a result. That’s still great news for anyone watching the mobile industry, but what about all those who supported the campaign financially?

Canonical opted to set up its Indiegogo campaign with the “Fixed Funding” plan, meaning that if a project doesn’t meet its goal, the money just goes back to the pledgers. That’s good, because if they’d done the “Flexible Funding” method instead, Canonical would be allowed to keep all the money regardless.

However, even with Fixed Funding, Indiegogo keeps a percentage of the raised funds. With campaigns that reach their goals, Indiegogo keeps 4%; if a project doesn’t make, it keeps 9%.

One hopes that Canonical truly believed that it could raise $32 million for the Ubuntu Edge smartphone, because it’s possible that the company did this solely as a publicity stunt. If the latter is true, then Canonical cost all of its backers 9% of the money they pledged. At the “Founder” level, that’s nothing--a mere $1.80--but for those coughed up $695 to get their own Ubuntu Edge smartphone, that’s $62.55, and 5,674 people pledged at that level. That’s not to mention the $7,000 Enterprise Starter Kit level, $10,000 One Of A Kind level, nor the $80,000 Enterprise 115 Bundle.

That’s not to disparage publicity stunts--they’re almost always entertaining and generally harmless--but in this case, a lot of people lost money on it.

You could say that anyone who put money into the campaign knew well and good what they were getting into, and surely they all understood that the $32 million goal was a longshot, to say the least. For that matter, Bloomberg may have been tacitly in on the stunt in a way, throwing some cash at a venture that could in time shake up the mobile industry. (It’s not like they don’t have deep pockets and could spare it.) And perhaps it wasn’t a stunt at all. Maybe Shuttleworth, et al, truly believed that $32 million was a realistic goal.

But a company like Canonical should be careful not to take advantage of its passionate user base; platforms like Ubuntu exist and thrive because of the community. Staging a fundraising campaign that ultimately produces nothing of value for those who gave and also costs backers 9% of their donated money is not a great way to keep your supporters happy.